Investment reports

XP Inc. publishes 1Q22 KPIs

XP inc. XP, a leading technology platform and trusted provider of low-cost financial products and services in Brazil, today announced its KPIs for 1Q22. The Portuguese version of this press release is available in the Press Releases section of the IR website.

1. Investments

Assets in custody (in billions of R$)

*Concentrated deposits are deposits above R$5 billion per customer/economic group. These securities are more volatile in nature.

Total AUC was R$873 billion as of March 31, up 22% year-on-year and 7% quarter-on-quarter. Year-on-year growth was driven by R$207 billion of net inflows and R$49 billion of market depreciation.

Total net inflow¹ (in billions of R$)

¹Concentrated deposits are deposits greater than R$5 billion per customer/economic group. These securities are more volatile in nature.

Despite a very difficult economic environment with a new Covid peak in Brazil, the Russian-Ukrainian conflict and seasonal weakness in the first quarter, total net inflows amounted to R$46 billion in 1Q22 compared to R$48 billion in 4Q21 , down 5% sequentially. Adjusted by concentrated custodians, net inflows amounted to 30 billion reais, strengthening the resilience of our business model in a challenging scenario.

This environment weighed primarily on capital markets and client activity, which bottomed out in January. Since then, a rapid improvement in operational trends has taken place, with stronger performance in March across all of our channels and businesses. Our long-term goal is stronger than ever as we continue to improve people’s lives and disrupt the Brazilian financial sector, of which we represent less than 2% of the total revenue pool.

Active customers (in ‘000)

Active customers increased 17% and 3% in 1Q22 compared to 1Q21 and 4Q21, respectively, to a total of 3.5 million.

IFA network (in ‘000)

Our IFA network consisting of a total of 10.7,000 IFAs in 1Q22, up 4% quarter-over-quarter and 24% year-over-year. We intend to maintain our current leadership and further develop the IFA profession in Brazil over the long term, as we estimate that the total number of IFAs in the country could more than triple in the coming years.

Average daily retail transactions² (millions of transactions)

² Average daily trades including stocks, REITs, options and futures

Retail DATs totaled 2.3 million in 1Q22, down 28% year-over-year and 7% quarter-over-quarter. Consistent with market trends, the decline in DAT reflects Selic’s year-over-year increase associated with the challenges experienced in 1Q22.

NPS (Net Promoter Score)

Our NPS, a widely known survey methodology used to measure customer satisfaction, was 76 in March 2022, down from 74 in March 2021, reflecting our continued efforts to provide superior customer service at a lower cost. Maintaining a high NPS score remains a priority for XP since our business model is built around customer experience. The calculation of the NPS on a given date reflects the average scores of the previous six months.

2. New Verticals

pension funds

Total pension funds AUC³ (in billions of reais)

³ The total AUC of pension funds includes the AUC of XP Vida e Previdência and third-party funds distributed on our platform.

According to public data released by Susep, XPV&P continues with a market share of around 59% of net new money for pension funds in 2022 through February. Despite our constant growth, we still represent only 3.2% of the total market, in February 2022.

Total pension fund CSA was R$50 billion in 1Q22, up 45% year-on-year and 5% quarter-on-quarter. Rolling out the digital account will improve and benefit retirement entries with a much smoother experience.

Cards

POS credit card (in billions of R$)

Total TPV reached R$4.5 billion in 1Q22, compared to R$0.5 billion and R$4.4 billion in 1Q21 and 4Q21, respectively. The normalized growth rate reflects the seasonality observed in 4Q21, driven by Black Friday and the end-of-year holidays.

Active cards (in ‘000)

Total active cards topped 308,000 in 1Q22, growing 27% quarter over quarter and 316% year over year. The recent increase in the number of active cards is linked to our decision to lower the credit card eligibility threshold to a minimum of R$5,000 invested in the XP platform at the beginning of December, thus democratizing access to Visa cards. Infinite to most of our XP brand customers.

These results help us confirm the importance of investments as a differentiator for cross-selling low switching cost products, such as credit cards. Based on customer data and assumptions, we estimate that over 50% of our cardholders have the XP card as their primary card. On top of that, we are seeing cardholders with 4x lower churn.

Credit

Credit portfolio4 (in billions of reais)

Our credit portfolio reached R$11.5 billion in March 2022, growing 12% quarter-on-quarter and 142% year-on-year. The average maturity of our credit portfolio was 3.2 years, with a 90-day non-performing loan (NPL) ratio of 0.0%.

4This portfolio does not include intercompany and credit card related loans and receivables

Non-GAAP Measures

This release includes certain non-GAAP financial information. We believe this information is meaningful and useful in understanding the business and business metrics of the company’s operations. We also believe that these non-GAAP financial measures reflect an additional way of viewing those aspects of the Company’s business which, when considered together with our results under International Financial Reporting Standards, as reported by the International Accounting Standards Board, provide a more comprehensive understanding of the factors and trends affecting the Company’s business. In addition, investors regularly rely on non-GAAP financial measures to assess operating performance and such measures may highlight trends in the Company’s business that might otherwise not be apparent when relied upon. on financial measures calculated in accordance with IFRS. We also believe that certain non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in evaluating public companies in the Company’s industry, many of whom present these measures when presentation of their results. Non-GAAP financial information is presented for information purposes and to enhance the understanding of IFRS financial statements. Non-GAAP measures should be considered in addition to results prepared in accordance with IFRS, but not as a substitute for or superior to IFRS results. Because other companies may determine or calculate this non-GAAP financial information differently, the usefulness of these measures for comparative purposes is limited.

About XP

XP is a leading technology platform and a trusted provider of low-cost financial products and services in Brazil. XP’s mission is to disintermediate the legacy models of traditional financial institutions by:

  • Educate new classes of investors;

  • Democratize access to a wider range of financial services;

  • Develop new financial products and technology applications to empower clients; and

  • To provide industry-leading customer service and customer experience in Brazil.

XP offers its clients two main types of offerings, (i) financial advisory services for retail clients in Brazil, high net worth clients, international clients and corporate and institutional clients, and (ii) a open form of financial products giving access to more than 800 investment products, including equities and fixed income, mutual funds and hedge funds, structured products, life insurance, pension plans , real estate investment trusts (REITs) and others of XP, its partners and competitors.

Forward-looking statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date first issued and are based on expectations, estimates, forecasts and projections as well as management’s beliefs and assumptions. Words such as “expect”, “anticipate”, “should”, “believe”, “hope”, “aim”, “target”, “project”, “goals”, “estimate”, “potential” , “predict”, “may”, “will”, “could”, “could”, “intend”, variations of these terms or the negative form of these terms and similar expressions are intended to identify these forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances beyond XP Inc’s control. implied in forward-looking statements due to many factors, including, but not limited to: competition, changing customers, regulatory actions, changing external forces, among other factors.